Air New Zealand longhaul fleet faces years of disruption

Air New Zealand could be two Dreamliners short for up to two years because of engine problems.

Chief executive Greg Foran said the airline was leasing more aircraft to make up for the two Boeing 787s missing from the existing 14-strong fleet.

The planes’ Rolls-Royce engines need heavy maintenance and are off the wing for some time and there are no replacement engines available.

Foran said it could be 18 months to two years before the planes were back in the air.

This is putting pressure on the international network and has led to the suspension of services from Auckland to Chicago until about the middle of next year, affecting thousands of passengers. It had earlier paused services to Seoul due to the engine issue.

The long-running Rolls-Royce engine issue continues to plague all airlines using them after turbine blade issues came to light in 2018.

Rolls-Royce Trent 1000 engines normally require heavy maintenance - where they are taken off the aircraft and sent to the offshore manufacturer for inspection - after 1000 engine cycles of take-offs and landings. But during regular inspections, Air New Zealand engineers identified that the engines required maintenance after 750-850 cycles.

Rolls-Royce has been unable to provide the airline with spare or replacement engines to deliver the level of service needed, leading to a reduction in the amount of flying Air New Zealand can do.

To cover the lost capacity, the airline has leased extra Boeing 777s.

Foran said this was complex and costly.

‘‘The aircraft that you lease invariably come with a different seat layout, different seats, require different spare parts, different galley carts, they require different pilots. And so you incur this enormous cost because your fleet is not the fleet that you thought you were going to have,’' he said.

‘’It is what it is and you just have to deal with it. That’s undoubtedly one of the reasons that we are under pressure in terms of profit.’'

Last month, Air New Zealand cut its full-year outlook.

Since providing guidance in February of earnings before taxation in the range of $200 million to $240m, Air New Zealand has continued to see softening in revenue conditions over the fourth quarter both domestically and on the North American market.

These softer revenue conditions are expected to result in lower underlying profitability for the 2024 financial year of about $40m to $50m. It will announce the result in August.

Foran said new fan blades for the Rolls-Royce engines were being developed but they need to be tested and approved through the Federal Aviation Administration in the United States.

The first of Air New Zealand’s new Dreamliners were due for delivery at the end of next year. Those aircraft were due for delivery from 2021 but the order was paused and delayed to 2022 because of Covid-19. But manufacturing delays and other problems at Boeing would push that out to the end of 2025.

For its new Dreamliners, it has ditched Rolls-Royce in favour of GE engines.

Foran said Air New Zealand was in touch with Boeing on a weekly basis.

‘‘Every airline who has a Boeing on order has got the same issue. We’re in as good a shape [as any] that I talk to around the world with Boeing.’'

Foran said the retrofit of existing Dreamliners with new cabins was on track, with the first due in the network at the end of the year.

Foran said the airline will soon have up to five A320/21 aircraft grounded at times, mainly affecting its domestic network.

Pratt & Whitney (P&W) engines are spending longer off wings of A320/321 aircraft than expected in what is a worldwide problem affecting hundreds of the planes.

Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.